The central government has put a hold on increasing dearness allowance (DA) for its employees as the coronavirus pandemic has put the economy under stress.
The Union Cabinet in March approved increasing the DA by 4 per cent to 21 per cent. A government source confirmed that the move has been put on hold, The Economic Times reported.
Revenue from taxes have diminished and costs of products have elevated due to the support extended towards vulnerable groups.
This move will affect about 49.26 lakh central government employees and 61.17 lakh pensioners.
The dearness allowance is revised twice a year to compensate for rising prices. The next revision will now be done in July.
The government had already cut salaries of ministers, PM, president and members of parliament by 30 per cent. MPLADS fund has also been suspended for two years to allocate more resources towards fighting coronavirus. This delay in DA hike is the first COVID-19 impact on central government employees. It will save the government about Rs 8,000 crore.
Several states across the country have already reduced salaries of their employees.